Mortgages in Saudi Arabia: what to know before applying

Down payment

Under Saudi Central Bank rules, the maximum financing ratio for a citizen's first home is 90%, so a minimum 10% down payment. Some subsidised programmes offer a down-payment guarantee.

Profit rate: fixed or variable?

Fixed protects you from rising rates; variable starts lower but moves with SAIBOR. For long terms, fixed is usually safer.

Debt burden ratio

Your total monthly instalments divided by income must not exceed the allowed limit (up to 55% for citizens in specific cases). An instalment above the limit gets rejected even with a high income.

Real estate transaction tax

5% of the deal value, with the first SAR 1,000,000 exempt for citizens buying a first home, subject to conditions.

Costs people forget

• Valuation fee
• Bank administrative fees
• Property and life insurance
• Brokerage commission (2.5%)

Use the mortgage calculator on Almowffer to see the instalment and total cost before applying.